China's Chery Announces Five-Car Model Range
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Snag
Plans 2 Import Chinese Cars Hits Snag
By James R. Healey, USA TODAY
Problems with everything from money to pollution have disrupted plans to sell Chinese cars in the USA.
Veteran auto entrepreneur Malcolm Bricklin's deal with China's Chery Automotive stalled — just briefly, Bricklin insists — for lack of money. And cars from rival automaker Geely flunked trial runs of U.S. emissions and side-crash tests, so engineers must redesign the cars and engines.
Conventional wisdom is that cheap Chinese cars are inevitable in the USA. But hiccups at Chery (CHAIR-ee) and Geely (JEE-lee) show it won't be a snap.
"Yes, they will be here. The question is who will be first," says George Peterson, head of consultant AutoPacific. He says Bricklin will be lucky to be selling cars by mid-2008, nearly a year later than planned. Geely "looks as if it is less prepared" and will take longer.
"It took the Japanese 20 years to understand this market and build appropriate cars," Peterson says.
Bricklin had been trying to raise $200 million, $2 million at a time from each dealer who signed up. So far, he says he has only 37 dealers. "We thought we were going to get the money sooner," he said by phone from China last week. He was there reassuring Chery that he now has $225 million from Atlantic-Pacific Capital. That company wouldn't comment.
"The joint venture (with Bricklin) is not settled yet," Chery spokesman **** Wei said Friday. "It takes time." Just 30 days or so of paperwork and other formalities, Bricklin says. Then Chery can begin developing vehicles designed by Bricklin's team specifically for the USA. Chery wanted to see Bricklin's cash first.
He hopes to begin selling vehicles in the USA by late next year. Unrealistic, says Michael Dunne, veteran of China's auto industry and now president of China-based consultant Automotive Resources Asia: "We are talking 2008 or 2009; 2007 is very unlikely."
Geely's problems could be more damaging. "We have a major problem with the current engine," says John Harmer, COO of Geely-USA. It won't pass U.S. anti-pollution rules and could be difficult to redesign. Buying engines from another maker would boost costs and probably prevent Geely from hitting its goal of a $10,000 U.S. selling price.
The car also failed a side-impact test designed to duplicate the government's. Geely engineers are traveling to the USA in the next few weeks to review the safety tests so they can redo the car, Harmer says.
Harmer forecasts a late '08 U.S. on-sale date, initially in only a few markets, probably near ports.
Chinese automakers "will face a tremendous amount of consumer resistance, because of their newness, until they prove they can be trusted," says Dan Gorrell, vice president at Strategic Vision research and consulting. In addition to low prices, they'll probably need long warranties and the kind of kid-glove showroom treatment typical of luxury dealerships, he says.
By James R. Healey, USA TODAY
Problems with everything from money to pollution have disrupted plans to sell Chinese cars in the USA.
Veteran auto entrepreneur Malcolm Bricklin's deal with China's Chery Automotive stalled — just briefly, Bricklin insists — for lack of money. And cars from rival automaker Geely flunked trial runs of U.S. emissions and side-crash tests, so engineers must redesign the cars and engines.
Conventional wisdom is that cheap Chinese cars are inevitable in the USA. But hiccups at Chery (CHAIR-ee) and Geely (JEE-lee) show it won't be a snap.
"Yes, they will be here. The question is who will be first," says George Peterson, head of consultant AutoPacific. He says Bricklin will be lucky to be selling cars by mid-2008, nearly a year later than planned. Geely "looks as if it is less prepared" and will take longer.
"It took the Japanese 20 years to understand this market and build appropriate cars," Peterson says.
Bricklin had been trying to raise $200 million, $2 million at a time from each dealer who signed up. So far, he says he has only 37 dealers. "We thought we were going to get the money sooner," he said by phone from China last week. He was there reassuring Chery that he now has $225 million from Atlantic-Pacific Capital. That company wouldn't comment.
"The joint venture (with Bricklin) is not settled yet," Chery spokesman **** Wei said Friday. "It takes time." Just 30 days or so of paperwork and other formalities, Bricklin says. Then Chery can begin developing vehicles designed by Bricklin's team specifically for the USA. Chery wanted to see Bricklin's cash first.
He hopes to begin selling vehicles in the USA by late next year. Unrealistic, says Michael Dunne, veteran of China's auto industry and now president of China-based consultant Automotive Resources Asia: "We are talking 2008 or 2009; 2007 is very unlikely."
Geely's problems could be more damaging. "We have a major problem with the current engine," says John Harmer, COO of Geely-USA. It won't pass U.S. anti-pollution rules and could be difficult to redesign. Buying engines from another maker would boost costs and probably prevent Geely from hitting its goal of a $10,000 U.S. selling price.
The car also failed a side-impact test designed to duplicate the government's. Geely engineers are traveling to the USA in the next few weeks to review the safety tests so they can redo the car, Harmer says.
Harmer forecasts a late '08 U.S. on-sale date, initially in only a few markets, probably near ports.
Chinese automakers "will face a tremendous amount of consumer resistance, because of their newness, until they prove they can be trusted," says Dan Gorrell, vice president at Strategic Vision research and consulting. In addition to low prices, they'll probably need long warranties and the kind of kid-glove showroom treatment typical of luxury dealerships, he says.
About Chinese products - I recently had to buy some quality scuba diving gear (breathing regulator, dive computer, boyancy compensator inflatable jacket, etc.). This stuff isn't cheap and must meet pretty rigorous safety measures and be high quality and highly reliable. Guess what - it's ALL made in China.
China will get there with cars, and quickly. The numbers are overwhelming and there's millions of smart people there to decipher U.S. regulations.
China will get there with cars, and quickly. The numbers are overwhelming and there's millions of smart people there to decipher U.S. regulations.
Lexus Fanatic
Joined: Jan 2005
Posts: 20,213
Likes: 261
Originally Posted by bitkahuna
Perhaps that's European tarriffs and not under Chery's control.
It is all vaporware. All these companies like Geely and Chery are actually currently minor manufacturers in China. Models they are going to sell dont even exist now. Its all a lot of talk and show and no go right now. For anything to change, decade has to pass at least.
There is an big difference between big brand names operating their factories in Chine as compared all Chinese companies operating their factories in China.
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